Fitness equipment maker Dyaco International Inc (岱宇國際) yesterday announced that it is to acquire North American exercise equipment brand Sole Fitness as part of its goal of transforming into an original brand manufacturer.
The company’s board of directors earlier yesterday approved the 100 percent share purchase of Fitness Equipment Services LLC for US$28 million on top of the net value of its assets and liabilities on the closing date of the deal, Dyaco said in an e-mailed statement, without giving a clear timeframe.
In a filing with the Taiwan Stock Exchange later yesterday, Dyaco said that it plans to set up a new US subsidiary to take over Sole Fitness, with an initial investment of US$35 million.
Sole Fitness is a major fitness equipment brand in North America targeting the mid-to-high-end home fitness equipment market, it said.
The two sides have been collaborating for 18 years, it added.
Dyaco supplies products to Sole Fitness on an original design manufacturing basis and helps sell the brand’s products outside of North America, Dyaco said, adding that it also assists in product development and design, patent filings and after-sales maintenance services.
Sole Fitness has posted about NT$2.3 billion (US$76.4 million) in average annual sales over the past three years, with an average gross margin of 23 percent and net profit of approximately NT$130 million, which would boost Dyaco’s finances, chairman Michael Lin (林英俊) said in the statement.
In addition, through the integration of resources on both sides, the acquisition would help Dyaco improve sales from online channels to physical stores in North America and further enhance the firm’s global competitiveness in the fitness equipment industry, Lin said.
Dyaco, which is headquartered in Taipei and has factories in Changhua County, manufactures fitness, health and wellness products for the home, commercial and medical markets. The company owns fitness equipment brands Spirit Fitness and Xterra Fitness, as well as produces and distributes products for other brands including Sole Fitness and Fuel Fitness.
Dyaco reported cumulative sales of NT$5.25 billion for the first 11 months of last year, up 7.34 percent year-on-year from NT$4.9 billion, while net profit for the first three quarters of last year increased to NT$112.91 million, from NT$7.36 million a year earlier.
Dyaco said in a separate filing that it is financially sound to carry out the acquisition, as it plans to use its own capital and bank loans, and would pay for the transaction in installments.
It added that it expects this month to complete a rights issue to raise NT$741 million.
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